Banks slash AUD forecasts

Major investment banks keep cutting their AUD/USD forecasts, explaining it by “structural” changes in the economy.

Today analysts at Credit Suisse lowered their 3-month forecast to $0.9200. That’s what they say: “Either the Australian dollar will fall of its own or the RBA will need to cut rates to bring it down”. Also today, UBS slashed its 3-month forecast for the Aussie from parity to $0.9500, explaining it mainly by the commodity price weakness. Last week Goldman Sachs cut its 12-month forecast from $0.9800 to $0.9000 on bets that capital flows into the currency would slow as investors’ search for yield wanes and prices of key commodities like iron ore trend down into 2015.